NEW YORK (CNN/Money) -
Johnson & Johnson agreed again to buy medical device maker Guidant at a reduced $21.5 billion price, the company announced Tuesday.

J&J (Research) said it will pay $63.08 a share for Guidant (Research) in cash and stocks. J&J said the net value of the deal is $19 billion when Guidant's cash on hand is taken into account.

J&J has already received much of the regulatory approval needed to buy Guidant, although it will have to sell off some businesses to comply with regulators' demands. The new deal is expected to close in the first quarter of 2006.

Shares of Dow component J&J gained 49 cents to $61 in pre-market trading on Inet following the announcement, while shares of Guidant shot up $4.55, or nearly 8 percent, to $62.30 following the announcement.

The health care products maker agreed last December to pay $76 a share for Guidant. But that deal was scrapped, with J&J citing product recalls at Guidant and the related regulatory investigations, and Guidant filing a lawsuit against J&J trying to force it to complete the deal.

The new price is a premium of about 9 percent over Monday's closing price, but it is off nearly 15 percent from the closing price of Guidant stock Oct. 17, right before J&J Chief Financial Officer Robert Darretta told industry analysts in a conference call that the company would "consider alternatives under our merger agreement" due to the recalls and safety concerns about Guidant's products.

J&J never formally called off the previous deal, but it continued to insist the revelations about Guidant had a material adverse effect on the company and allowed it to drop out of the deal. On Nov. 7, Guidant sued to try to force J&J to proceed with the deal along the earlier terms. But even as it was taking that action, it was reporting lower earnings and a widening probe of the company by the Securities and Exchange Commission.

Guidant also announced Tuesday that President and CEO Ronald W. Dollens was leaving the company as part of what it termed "his previously announced retirement." Guidant Chairman James Cornelius will serve as interim CEO.